NAFTA con­sul­ta­tions be­gin

Rene­go­ti­a­tion gets of­fi­cial green light from Trump; Canada pre­pares for talks later this sum­mer


— The United States has of­fi­cially served no­tice of its in­ten­tion to rene­go­ti­ate the 1993 North Amer­i­can Free Trade Agree­ment, trig­ger­ing a 90-day con­sul­ta­tion win­dow be­fore talks be­gin later this sum­mer with Canada and Mex­ico.

The Trump ad­min­is­tra­tion rang the open­ing bell Thurs­day with a let­ter to the key con­gres­sional power-bro­kers who must now be con­sulted as U.S. ne­go­tia­tors pre­pare their list of pri­or­i­ties.

The let­ter it­self was mun­dane. It cited the need to mod­ern­ize a creaky old agree­ment, add new pro­vi­sions rel­e­vant to the mod­ern econ­omy, and men­tioned things al­ready ne­go­ti­ated in the Trans-Pa­cific Part­ner­ship, the deal aban­doned by Don­ald Trump: dig­i­tal trade flows, in­tel­lec­tual prop­erty, lim­its on state-owned en­ter­prises.

It barely filled a sin­gle page and was dras­ti­cally scaled back from the laun­dry list of com­plaints in­cluded in a draft ver­sion ear­lier this year. Some U.S. pro­po­nents of a hard­ball ap­proach ex­pressed dis­ap­point­ment.

But it’s still early. The vague­ness of that let­ter left wig­gle room for the ad­min­is­tra­tion to ad­just its pri­or­i­ties over the com­ing months, as it pre­pares a more de­tailed list to be re­leased in about 60 days.

One key U.S. player has hinted at a tougher ap­proach. He may have sig­nalled it by choos­ing the day of the NAFTA no­tice to make an­other an­nounce­ment in­volv­ing Canada, one ex­pected for a while: that the U.S. will ex­plore whether Cana­dian sub­si­dies could lead to U.S. du­ties on Bom­bardier.

“Free and fair trade is the new stan­dard for U.S. trade deals,” said Com­merce Sec­re­tary Wil­bur Ross, who is­sued sep­a­rate state­ments on NAFTA and Bom­bardier. “Since the sign­ing of NAFTA, we have seen our man­u­fac­tur­ing in­dus­try dec­i­mated, fac­to­ries shut­tered, and count­less work­ers left job­less. Pres­i­dent Trump is go­ing to change that.”

The long-stand­ing as­sump­tion in the na­tional cap­i­tals is the ne­go­ti­a­tions will ul­ti­mately touch some of the hot-but­ton is­sues in Canada-U.S. trade — dairy, auto parts, lum­ber, phar­ma­ceu­ti­cals, duty-free shop­ping, liquor im­ports and Buy Amer­i­can rules.

A prin­ci­pal rea­son these talks could grow in scope is be­cause of the U.S.’s cho­sen venue for up­dat­ing the deal. It is go­ing through the U.S. Congress’s fast-track law. Un­der it, law­mak­ers give up their con­sti­tu­tional right to amend the deal, but get con­sulted con­stantly.

Canada had ini­tially hoped for a quicker, eas­ier, more cos­metic pro­ce­dure.

The fed­eral gov­ern­ment tried pitch­ing the idea of sim­ple changes by point­ing out re­peat­edly in the weeks af­ter Trump’s elec­tion that NAFTA has al­ready un­der­gone a dozen tweaks over time — all with­out in­volv­ing Congress.

Only one North Amer­i­can leader has made it a core com­mit­ment to redo NAFTA: Trump. And the grum­bling of dif­fer­ent con­stituen­cies will make it harder to win the nec­es­sary votes and keep his cam­paign pledge.

In Ot­tawa, For­eign Af­fairs Min­is­ter Chrys­tia Free­land said Canada will ne­go­ti­ate in good faith. “We are ready to roll up our sleeves,” Free­land said.

“We will work hard and se­ri­ously on up­dat­ing this es­sen­tial agree­ment ... Our fo­cus in Canada is on get­ting a good deal.”

Trump might soon be forced to de­cide what he wants. Right now, he says he wants a quick deal and a thor­ough deal. Get­ting the lat­ter might not be easy be­fore 2019, as the Mex­i­can elec­tion en­ters full swing in a few months, fol­lowed by the U.S. midterms.


Min­is­ter of For­eign Af­fairs Chrys­tia Free­land said Canada will rene­go­ti­ate NAFTA in good faith with a fo­cus on up­dat­ing the agree­ment.

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